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Russia: A Need to Diversify Russian Export

April 12, 2012

The Agency for Strategic Initiatives and the World Bank Discuss Russian Export Diversification

Moscow, April 12, 2012 – A joint World Bank-and Agency for Strategic Initiatives (ASI) panel discussion on challenges and possibilities for Russian export diversification took place today in the “Small Hall” of  RIA Novosti.

A report undertaken by the World Bank, specifically on Russia’s recent export performance, was presented during the panel discussion. The report identified key challenges the private sector faces to increase exports to new markets with new products and suggested, as well, reforms that the government may want to consider in order to address these challenges.

According to the authors of the report, Russia underperforms with respect to its trade potential; this is caused, inter alia, by a narrow range of export products, the inability of exporters to maintain a presence in new markets after having entered into these markets, and a disproportionate focus on exporting to the same markets with the same products.  At the root of this persistent underperformance in diversifying exports is weak domestic competition and a burdensome investment climate.

The authors, also provide a positive assessment of the Russian Government initiatives aimed at supporting innovation, and consider these initiatives necessary to encourage entrepreneurship and export diversification. Over the past two decades, both federal and regional authorities of the Russian Federation have spent significant amounts on innovation promotion – from building physical infrastructure (industrial estates and special economic zones) to establishing venture funds, financing R&D at research institutes as well as employing a range of other support tools. Yet policymakers are still unclear as to their impact on the modernization of Russia.

The panel discussed approaches to innovation support,  to accelerate innovation through quick learning that would allow innovative ideas and ventures measures to succeed when they are good and to die quickly and cheaply when they are not.

The panel was comprised of World Bank economists Alvaro Gonzalez and Jose Guillherme Reis and Senior Private Sector Development Specialist Jean-Louis Racine; Leading Researcher of the Institute of Enterprise and Market Analysis Boris Kuznetzov; and Deputy General Director of the Inter-Agency Analytical Center Yuri Simachev. The panel was moderated by Alexander Pirozhenko, Director of ASI’s Partnership Networks Development.

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